The present invention relates generally to commerce systems, and more particularly to a commerce system that discourages buyers from submitting repetitive offers for a product to determine a selling price.
Most conventional systems for selling products are seller-driven commerce systems, wherein a seller establishes conditions, including price, for the sale of a product, and buyers determine whether or not to purchase that product. Examples of seller-driven commerce systems include conventional retail systems, both in a traditional store environment, and in an electronic environment as established on the Internet. Amazon.com, for example, is representative of a traditional seller-driven commerce system, i.e. a bookstore, that has been implemented electronically on the Internet. It is the applicant""s belief that the vast majority of consumer sales are transacted using the seller-driven model.
A heretofore less common method of selling products is buyer-driven commerce, where a buyer creates an offer setting the terms and conditions of a potential purchase. The buyer offer is made available to many sellers, for example through a paper or electronic xe2x80x98want ad,xe2x80x99 and interested sellers may contact the buyer to complete the transaction.
While much infrastructure has long been established to support seller-driven commerce, buyer-driven commerce represents a somewhat newer, lesser used type of commerce having much less supporting infrastructure. Prior to the existence of electronic networks such as the Internet, and certain business models developed thereunder, applicant""s believe no cost-effective infrastructure existed for supporting buyer-driven commerce systems. Facilities for supporting seller-driven commerce include, for example, highly-effective advertising channels, automated payment processing systems, established and readily available fulfillment systems, and other similar facilities for supporting steps of the seller-driven sales process. In contrast, many of the analogous facilities necessary to support buyer-driven commerce do not exist on the same established, economically feasible and effective scale.
Communications and advertising channels through which buyers may reach sellers are not, for example, as well established and effective as are the communications and advertising channels available for sellers to reach buyers. Similarly, it is typically more difficult and time-consuming for a seller to contact a buyer, consummate a transaction, and collect a payment based on a buyer-driven offer, than it is for a seller to perform these same functions in a more traditional seller-driven commerce environment. The development of electronic networks, as well as the invention of new commerce models and infrastructures using these networks, have moved towards making the process of buyer-driven commerce more practical and economically feasible on a large-scale basis.
Priceline.com Incorporated of Stamford, Conn. is a merchant that has successfully implemented a buyer-driven commerce system for the sale of products such as airline tickets, hotel accommodations, and automobiles. Priceline.com utilizes a Conditional Purchase Offer (CPO) Management System, described in U.S. Pat. No. 5,794,207 and International Application Number PCT/US97/15492, that processes buyer-generated conditional purchase offers (CPOs) received from individual consumers. These CPOs contain one or more buyer-defined conditions for the purchase of goods or services, at a buyer-defined price. They may be guaranteed by a general purpose account, such as a debit or credit card account, thereby providing sellers with a mechanism for collecting payments on accepted CPOs. The CPO Management System operates to automatically process CPOs for potential fulfillment by a seller. Automated processing systems developed by priceline.com make the buyer-driven commerce system cost-effective on a large scale. The potential to receive customer offers backed by credit cards, i.e. xe2x80x9cguaranteed demandxe2x80x9d, makes the system very effective for sellers. If a seller accepts a CPO, the CPO Management System may bind the buyer on behalf of the accepting seller, to form a legally binding contract between the parties.
The CPO Management System thus empowers individual consumers to obtain goods and services at their own specified prices. The CPO Management System provides numerous commercial advantages to sellers as well. For example, certain features of the system, including anonymity and data security, enable the seller to adjust his price and terms to meet a consumer offer without publicly undercutting his own retail price structure. This enables the seller to identify and accept incremental, price-sensitive sales in a manner not typically feasible through a conventional retail process.
In many implementations of the above-described buyer-driven commerce system, it is important that a seller""s lowest price, or floor price, remain a secret from the buyer. If the general buyer population discovers the seller""s floor price, then there is no incentive for any buyer to offer a reasonable price for those products. Every buyer will eventually offer only the floor price, the seller""s traditional retail prices and distribution channels will be undercut, and that seller may suffer or fail in the marketplace. Further, public knowledge of a seller""s floor price will enable his competitors to determine his profit margins on particular goods, providing his competitors with an unfair advantage and an opportunity to undercut his position in the market.
One problem foreseen by the inventors is the likelihood that buyers (including competitors) may attempt to determine a seller""s lowest price is to xe2x80x98pingxe2x80x99 the system by submitting repetitive offers to the system with incrementally increasing prices. For example, if a buyer believes a seller""s floor price to be in the range of ten to fifteen dollars for a particular product, he may submit a first offer at nine dollars. If that offer is rejected, he would then submit subsequent offers, increasing the offer price incrementally (for example by one dollar), until an offer is accepted. At that time, the buyer knows the seller""s lowest price, and may communicate that price to competitors and to other potential buyers.
The present inventors have thus determined that, in order for at least some methods of buyer-driven commerce to operate successfully, it is necessary to develop methods and systems for preventing buyers from determining lowest available seller prices. It is particularly desirable to prevent buyers from pinging the system to make such a determination.
A principle object of the present invention is to provide a system and method whereby buyer users of a buyer-driven commerce system are effectively discouraged from submitting repetitive offers in an effort to determine a lowest seller price for a particular product.
In accordance with a first embodiment of the present invention, there is provided a system and method of processing offers for the purchase of products, the method comprising the steps of: receiving from a party at least first and second offers for a product; comparing the first and second offers; and if the first and second offers fall within a predetermined range of similarity, then performing a first selected process on at least one of the first and second offers.
In accordance with another aspect of the invention, there is provided a system and method of processing offers for the purchase of products, the method comprising the steps of: receiving from a party a first offer, the first offer including a plurality of offer terms each having a respective first value; receiving from the party a second offer, the second offer including the plurality of offer terms each having a respective second value; determining for each of the plurality of offer terms a corresponding unacceptable similarity range; comparing the respective first values with the respective second values for each of the offer terms; and performing, if the respective first and second values for at least one of the plurality of offer terms fall within the unacceptable similarity range, a first selected process on the second offer.
In accordance with yet another embodiment of practicing the invention, there is provided a system and method of processing offers for the purchase of products, the method comprising the steps of: receiving from a party a first conditional purchase offer, the first conditional purchase offer including a plurality of offer terms each having a respective first value; receiving from the party a second conditional purchase offer, the second conditional purchase offer including the plurality of offer terms each having a respective second value; the plurality of offer terms including a condition, a purchase price, a payment identifier, and an authorization to use the payment identifier to pay the purchase price; determining for each of the plurality of offer terms an unacceptable similarity range; comparing the respective first values with the respective second values for each of the offer terms; if the respective first and second values for at least one of the plurality of offer terms fall within the unacceptable similarity range, performing a first process on the second offer; and if the respective first and second values for the plurality of offer terms do not fall within the unacceptable similarity range, performing a second process on the second offer.